Hot Drink Vending Scores Solid Success Over 4 Decades

U.S.A. - The developments in consumer preference, corporate consolidation and marketing strategy that have transformed the cold drink market over the past decade or so have set the stage for a very interesting summer, and the vending industry has a front row seat.

The brands with which successive generations of Americans have grown up are now grouped into four powerful organizations. Two of them, The Coca-Cola Co. and PepsiCo Inc., dominate the formerly unchallenged and highly lucrative cola business. While they have proven very capable of replying to challenges from new cold drink categories with strong contenders of their own, they have launched major initiatives to revitalize the flagship products that made them household names.

Coca-Cola's "Vanilla Coke" made its debut last month. It is the first new Coca-Cola flavor since "Cherry Coke" (in 1985). Like "Cherry Coke," "Vanilla Coke" prompts memories of the flavor creativity offered by a traditional soda fountain. It features package graphics incorporating the "Coke" brand name in a script suggestive of the Coca-Cola trademark, along with the company's signature "wave" ribbon. This look also will be applied to "Cherry Coke."

Pepsi-Cola North America plans to debut "Pepsi Blue" in August. It blends a new berry flavor with the cola, and will be packaged in clear 20-fl.oz. bottles highlighting the blue color. It is targeted primarily at teens, and Pepsi hopes it will enjoy the same kind of success as "Mountain Dew Code Red" did last year.

Cadbury Schweppes plc has assembled a formidable group of famous North American soft drinks into Dr Pepper/Seven-Up. Its flagship "Dr Pepper" brand is slated to receive the first flavor addition in its long history, with the debut of "Red Fusion" in July. It adds a fruit flavor blend to the distinctive taste of "Dr Pepper," is red in color, and will be offered as single servings in 20-fl.oz. bottles and 12-fl.oz. cans.

Snapple Beverage Group, which has combined a number of pioneering "new age" beverage brands into a second Cadbury Schweppes North American unit, already has launched a concerted campaign to revitalize ready-to-drink flavored teas and other alternative drinks (see V/T, March).

Single-serve bottled waters represent the fastest-growing cold beverage category at retail, and apparently in vending too (see story on Page 12). The major soft drink players have popular water lines of their own, notably Coca-Cola's "Dasani" and Pepsi-Cola's "Aquafina," and they compete against such international titans as Perrier Group and Danone. All of these can develop any number of line extensions, and many are doing so.

Juices and juice drinks, sports drinks and energy drinks, ready-to-drink teas and ready-to-drink coffees, shelf-stable dairy and dairy-based beverages are being developed, tested and deployed by organizations with the skills and the resources to determine their best fit in the marketplace.

Milk also is again becoming a contender. Operators who have the ability to store and transport perishable items are finding that patrons view the new "plastic pint" package as another "grab-and-go" cold beverage, and an attractive one. Shelf-stable milk beverages in aseptic drink-box packaging are waiting in the wings.

On the one hand, all of this may appear to offer the prospect of continually increasing logistical complexity for operators who already are reequipping their truck fleets with heavier-duty vehicles to handle increasing quantities of 16-fl.oz. glass and 20-fl.oz. plastic bottles containing an ever more bewildering variety of beverages.

On the other hand, it presents a far more promising profit picture than the classic full-line model of a six- or eight-select machine in which the flagship cola and its diet stablemate did the lion's share of the volume. Today's (and tomorrow's) operator who determines his location preferences accurately enjoys the prospect of installing a machine in which every column is stocked with something that a substantial number of customers will want every day, and often will be willing to purchase at a higher price than that of the line-leading cola.

Adding to the opportunity are established regional brands, some with long histories and devoted followings. Even "Moxie," arguably the world's first soft drink, is still available in New England, though there have been no reports of anyone vending it.

Showgoers attending the Atlantic Coast Exposition early this month had the opportunity to observe today's vast cold drink variety.

Water remains high on the list of top-selling beverages in all retail sectors throughout the country, and vending is no exception, as evidenced in the exhibit area at ACE. Suppliers are bringing to the market every variation of bottled water as consumers look for twists on the original, whether flavored, distilled, purified, carbonated, sweetened or fortified with vitamins.

Representatives from Allegheny Products were at the Atlantic Coast Exposition to promote the company's "Anquet" natural spring water to operators in the Southeast. The water is nitrogen injected to keep the bottles firm, resulting in less jamming and down time for vending machines. It is available in 8-fl.oz., 16.9-fl.oz. and 24-fl.oz. flat cap bottles.

Consumers familiar with the signature taste of the iced tea that has been served at the famed 55-year-old Beacon Drive-In in Spartanburg, SC , one of the few drive-in restaurant legends remaining that offers curb side service , can now buy the beverage from vending machines. "Beacon Drive-In Iced Tea" began as a southern favorite and has developed a nationwide following. It's available from Beacon Food Services Inc. in two 16-fl.oz. varieties: Original Flavor with Lemon and Sweet Southern Tea. Bold, colorful graphics depict the familiar Beacon lighthouse icon and the slogan: "Tea for the Southern Taste." The product's shelf life is 120 days from manufacturing date. "Beacon Drive-In Iced Tea" is currently in distribution in North Carolina, South Carolina, Virginia, Maryland, Georgia, Florida and eastern Tennessee, and the company plans to expand distribution to more states.

Expanding the new-generation vendible milk beverage category, Bravo! Foods exhibited its internationally famous "Looney Tunes"-branded 2% low-fat milk beverages in five flavors, packaged in widemouth plastic 12- and 16-fl.oz. bottles. Colorful full-wrap labels are highlighted by renowned cartoon characters licensed from Warner Bros., including Bugs and Lola Bunny, Tweety and Sylvester, Wile E. Coyote and the Roadrunner and Daffy Duck. The line is available in the United States through Quality Chekd, a national dairy cooperative, and local member dairies. Flavors include vanilla shake, orange cream, chocolate, strawberry and banana.

A regional favorite, "Cheerwine," was showcased at ACE. Representatives from Carolina Beverage Corp., headquartered in Salisbury, NC, handed out samples of the trademark soft drink with a unique cherry taste and rich burgundy color to vending operators who serve a loyal following of the brand in the southeastern U.S. The company also expanded its product line during ACE with the rollout of "Cheerwine Swirl" ice cream. "Cheerwine" and "Diet Cheerwine" are distributed in North Carolina and South Carolina, as well as in parts of Tennessee, Georgia, Virginia and West Virginia. The company also plans to expand into new markets.

During the show, Coca-Cola was also readying for the much anticipated mid-May rollout of "Vanilla Coke," the fourth flavor extension in the history of the 116-year-old brand. The convention marked the debut of Cherry Vanilla and Peach Out varieties of "Fruitopia" juice drinks in 20-fl.oz. PET and 12-fl.oz. cans.

The self-contained refrigeration unit can be easily accessed for service, and loading and unloading are simple, allowing for greater efficiency in the field. The machine measures 72 ins. high x 52 ins. wide x 35 ins. deep.

Meeting the needs of the growing Hispanic customer base, El Maizal, Inc., a full-line distributor of Hispanic food and beverage products, showcased a variety of fruit juices and nectars with popular Hispanic labels, including "Goya," "Lulu," "Boing," "Nactasis," "Delicias," "Barrilitos," "El Valle," "Lucas," "Novamex," "Tampico," "La Costena" and "Jumex." All of these brands offer sweet, tropical flavors that appeal to Hispanic populations, including apricot, guava, peach, pear, tamarind, mango, pineapple and strawberry. To help vending operators capture the favor of Hispanic patrons, the company also showcased its "Topo Chico" bottled mineral water.

On display in the Juice Bowl Products exhibit at ACE was "Artesia Water" in 11.5-fl.oz. cans, which complements the firm's pioneering line of vendible juices and juice drinks. Drawn from the Central Florida Aquifer (the source of the state's famous Silver Springs and other hydrological features), Artesia Water is processed by reverse osmosis to yield "great water , and nothing else." Juice Bowl's 11 juices and juice-based beverages are offered in a variety of packages, including 5.5- and 11.5-fl.oz. aluminum cans, 10-fl.oz. glass and 16-fl.oz. PET bottles.

Le Bleu Corp. contributed an innovative addition to the beverage category during ACE with the introduction of "Le Bleu Le Cola," the only cola formulated with branded purified water, in 12-fl.oz. cans.

The company also uses its flagship purified water as the base for its 20-fl.oz. "Le Bleu Iso-Ade" sports drink in Orange Burst, Red Thunder, Volcanic Blast and 'Lectric Lemon-Lime varieties.

"Le Bleu Frute" is a line of non-carbonated fruit-flavored drinks made with purified water. The 20-fl.oz. line is available in Kiwi Strawberry, Fruit Punch, Grape and Orange varieties.

Le Bleu offers its purified bottled water in 12-fl.oz., 20-fl.oz., 1 liter, 1.5 liter, and five-gallon containers. The company steam distills its water and then performs additional purification through a patented process that assures water is sodium-free, chlorine-free, lead-free and oxygenated.

During ACE, Le Nature's introduced a line of 20-fl.oz. PET flavored "Ice Water" to Eastern markets from Boston to Atlanta, with planned expansion into additional U.S. markets this year. The line of purified water has a squeeze of natural fruit juice, minus the calories and sweeteners found in many other flavored water products. The all-natural brand features five refreshing citrus flavors: Squeeze of Lemon; Twist of Lime; Tropical Mist Mandarin; Lemon-Lime Blend; and Pink Grapefruit Splash.

The company also offers, in 20-fl.oz. PET packaging, a line of kettle-brewed iced teas, home-style lemonades, and "Vitamin Dazzlers" nutritionally enhanced juice beverages in Fruit Bowl, Wild Strawberry, Country Blackberry, Mountain Raspberry and Mandarin Orange.

According to AC Nielsen data, "Nesquik" represents four of the top five products in the single-serve flavored milk category. "Nesquik" supports the brand with television, radio, print, NASCAR, point of sale and relevant consumer programming.

Pepsi attracted ACE showgoers with the launch of "Lipton Brisk Lemonade." "Lipton Brisk Iced Tea" is a proven brand in the marketplace with an 86% awareness level, and according to company officials, "Lipton Brisk Lemonade" outperformed "Country Time" in independent taste tests. The rollout of "Brisk Lemonade" is supported by spot radio advertising, and point-of-sale materials and premiums are also available.

The new lemonade is available in 12-fl.oz. cans; 20-fl.oz. PET bottles; and one-liter and two-liter bottles.

Also new at the Pepsi booth was "SoBe Mr. Green," an energizing flavored soda with the herbal benefits of ginseng.

As part of its unprecedented push to establish a presence as the non-carbonated leader in vending and the launch of its major marketing initiative across its entire brand portfolio (see V/T, March), Snapple showcased its new PET bottle, designed to mirror its signature glass bottles. Company representatives also unveiled several new beverage varieties during ACE. Debuting at the convention were Snapricot Orange juice drink, blending orange juice and apricot juice; Snapple Apple juice drink; Very Cherry Iced Tea, combining natural cherry flavors with fresh-brewed tea; and calorie-free Diet Snapple Lime Green Tea, an innovative twist on green tea.

All of the drink rollouts are packaged in 16-fl.oz. glass bottles and feature boldly marked "New" tamperband and redesigned graphics to drive consumer trial.

Vendo showcased a prototype of its "V-Max 576" beverage vending machine, now available in a live display model, which will begin production later this year. The low-profile machine features eight columns, with a 12-fl.oz. can capacity of 72; 30 16-fl.oz. glass capacity; and 32 20-fl.oz. PET capacity. It measures 72 ins. high x 32-1/2 ins. wide x 31-1/2 ins. deep. The "V-Max" line is designed for increased capacity and package flexibility. An attractive, well-lit product display maximizes customer appeal, and conveniently located selection buttons make the machine user-friendly. Individual pricing label area directly below each displayed product provides fast price recognition.

"V-Max Live Display" models ship with standard two-sided graphic insert designed so custom, gray-backed decals can be applied right over existing pictures.

Yoo-Hoo, the classic chocolate soft drink that's now part of Snapple Beverage Group (see V/T, March) was on display in 11.5-fl.oz. cans bearing the familiar bright yellow and blue "Yoo-Hoo" logo. As part of Snapple Beverage Group's coordinated promotional campaign, a major summer consumer push featuring archetypal "Yoo-Hoo" fans Josh and Nathan, is planned to reinforce the beverage's popularity among its core 13-to-23-year-old audience.